NFC Playground: The basics – how Near Field Communication works

Since I cover Near Field Communication (NFC) for ecomPunk.com, I got questions from people, asking how it works practically. So here we are with the first NFC Playground article to lay out the basics for future coverage.

NFC is not really a new technology. The standard was published by NXP Semiconductors and Sony back in 2002. It describes the communication between peers in close distance (if you like to go into technical details read further on Wikipedia). The frequency and idea of communication is the same that is used for RFID. The idea is that: you have a passive transponder, that consist of an antenna with a small chip attached that contains the information storage. The antenna takes the most of the area of the transponder (as you can see in this picture). The transponder has no power supply. That comes with the active antenna. This antenna can be huge antennas as used in retail or industry applications or small ones like a card reader. The system is the same: the active antenna sends out radio waves that hit the antenna of the transponder. The transponder is able to convert the radio wave energy into power that is enough to send back its information. The difference between RFID and NFC is that NFC used much less power and therefore needs smaller antenna areas in transponders and also has very limited range. There is a distinction between active – active connections and active passive connections.

An active – active connection consists of a pair of active peers, for example a payment terminal and your NFC enabled phone. This is basically what Google Wallet does, when you put your phone near to the payment terminal to pay.

The active passive connection is between one active and one passive peer. This could be the payment terminal and your NFC enabled credit card. The example for this is the Mastercard PayPass system, where you hold your credit card near to a terminal to start the transaction.

One of the most questions I got was: what really is the distance for NFC? I made several tests with my Nexus s with different kinds of transponders. The average distance is between 4 and 5 cm to get the NFC module off the Nexus activated. So you really need to get close to make it work.

Also a lot of people are concerned by the security of NFC communication. From the practical point of use there no need to worry so far. The phone does not do anything by itself if pushed near a transponder. In case of the Nexus you first need to activate the phone and unlock it. If you then hold it near to the tag, the installed NFC reader software comes to action and asks you what you would like to do (for example read the text or go to the browser to open the URL). So contact-less communication does not mean action-less. In case of Google Wallet you also have to enter a PIN number to unlock payments. So as with most technology it like this: if you do not switch off your brains completely it’s quite secure.

So last question: how can you try it? The best way to get in the ring is buying an NFC enabled phone and some transponders (for example from Tagstand or from eBay). Since the phone usually are able to read and write tags you are ready to play around. Another possibility is to buy a reader/writer device with some tags. They can also be found on eBay. Usually they have simple software packages included, that contain simple programs to write and read the tags. With them you can also write your own software with NFC in it.

So now we have the playground officially opened! Let’s play with NFC applications and explore what impact that stuff will have for (e)commerce :-)